The level of the economic system affects all areas of the state. Therefore, it is not surprising that it is precisely by these indicators that one can determine the standard of living, unemployment, population, and other information. The modern economy of Germany is now a developed system, which takes 4 place in the whole country.
A little bit about the state
Before dealing with German GDP, attention should be paid to the general features of the country's economy. It is known that this European power is now industrial. On its territory are industrial agglomerations and major production companies. Successful development of the state’s economy is now considered its cooperation with major importers: France, America and England. Germany sends its best products and services to these countries.
Success lies in cooperation with EU countries. Germany is trying to take the most active part in this alliance. In the world, the German power is known primarily for its cars.
Economics system
The level of the German economy depends on a well-established system that is responsible for all spheres of the country's life. It is known that the most skilled workforce and well-developed infrastructure are located here. Of course, in order to stay at a high level among the developed powers, Germany created its own special economic system with specific features.
First of all, emphasis is placed on social market relations. In this case, social balance and market freedom are respected. So, the market in the country is in "free float", but this is done in order to socially provide the population of Germany. A similar form of economy became known immediately after the Second World War. Its main feature is the balance between economic growth and efficient allocation of funds. In the center of this model put power as an entrepreneur. She is engaged in the distribution of social benefits for the population of Germany. In order for a society to be strong and peaceful, the union and employers are strengthening their social relationships. Recently, a similar system began to fail due to the fact that almost half of the income of German companies goes to pay workers and replenish social funds. In addition, maintaining the economy at a high level is due to taxation.
Another model of the economic system is “Rhine capitalism”. This form works at the expense of the country's banks. Financial institutions are now considered the most active shareholders in leading companies in the industry and services. Therefore, the role of banks in Germany can be considered an integral part of the economy because of its influence. The problem in the system now remains the historical aspect, which at one time significantly influenced the general condition of the country. On the territory of the state you can see the uneven level of economic development. The eastern part of Germany is less developed, and the modernization of this segment is expensive.
Another particular feature of the economic system remains export. As already mentioned, the main focus of the country is the automotive industry. Given the fact that the state is focused on the open market, its presence in the world every year becomes more and more obvious. By 2010, the country's exports grew by 14%, the same thing happened with imports - 13%.
Reasons for development
The level of the German economy depends on several factors that affect the development of the financial system.Historically, the Germans never had fertile lands and a large number of minerals. Therefore, in order to improve the situation in the country, they directed their efforts towards technological progress, science, education and international relationships. In principle, a similar situation was observed throughout Western Europe. Many workers gathered here who supported the economic system. Despite the fact that in the last century there were changes in politics and society, the influx of new labor did not change. Nowadays, the number of immigrants affects the development of the German economy.
In addition to overseas workers, the country is trying to grow its smart people who could work with new technologies. "Human capital" is now an essential component of a power economy. Now there are 50% highly qualified employees among the entire population, and this is a percentage that exceeds the indicators of other countries.
Technical progress is also one of the first points in the development of the state. The scientific base was laid back in the late 19th century. During all this time, Germany has taken several huge research steps. According to statistics, German industrial companies have a huge number of patents, which exceeds the amount of other inventions in Europe. The Germans failed to overtake only America and Japan.
What does the country rest on
The main industries in Germany work for export, and therefore affect the general condition of the economy. The main direction in politics remains the service sector. Germany's GDP in this segment was almost 80% in 2011. It is known that engineering and equipment also make up the bulk of exports. Industry in the country provides its world leadership in this field. GDP indicators here range from 30-35%. In addition to these “two elephants”, there is a third, on which the whole country rests - these are information and biological technologies. This also includes the use of energy sources and the environment.
The Three Elephants of Economics
Now it’s worth analyzing the industries in more detail, since they affect the German GDP. The country's economy, as we have already found out, is built on services, industry and agriculture. By 2012, German GDP growth in the service segment reached 78%. Unlike other countries, Germany lags behind in terms of these indicators, but nevertheless keeps the economy afloat. The state specializes in tourism and financial services. The country has a well-established network of railways and roads, there are also high-quality air harbors and seaports.
Agricultural GDP barely reached 1-2%. Such data is due to the fact that after the Second World War, many states moved to industrial society. Therefore, agriculture was abandoned. By the end of the last century, the number of land plots increased to 14%. Most of them are located in Lower Saxony. Agriculture is now built only on small family farms which are located in the south of the country. Usually, hired workers work in this segment, and they are employed on farms only during the season.
German GDP growth also depends on industry. This industry is divided into several components that are engaged in the construction of automobiles, public transport, and technical equipment. There is also a significant share of ferrous metallurgy, chemistry, pharmaceuticals and cosmetics. Due to the emergence of new industries, German industry is changing. Some segments recede into the background, while others are developing rapidly. So, in due time the textile industry lost its relevance. Also, such changes are due to high competition among European countries and the world. Nevertheless, this sphere is still the leading one, as more than 8 million people are involved in it.
An important role in the development of the country, as has been said more than once, was played by the automotive industry.Due to the wide popularity of machines among consumers, research centers and branches of German companies began to appear around the world.
General indicators
Germany's share of world GDP by 2013 was 3.4%. The leader, as always, was America with an indicator of 16.5%. Already in 2016, indicative data were calculated, at which the dynamics of German GDP became clear. In the first quarter, the main contributor to the growth of the gross domestic product was the attention to private consumption and investment in construction. Even then, GDP indicators increased by 0.7%. Of these, a third brought consumer spending. Government spending and construction also affected. But due to the weak level of export, a tenth of a percent was still taken away from the general indicator.
Analyzing Germany’s GDP over the years, starting from the 70s of the 20th century, it is worth noting that the gross domestic product increased by more than 17 times. In monetary terms, this figure reached $ 3,500 billion. Such growth dynamics occurred primarily due to an increase in the country's population. For all this time, the average annual GDP growth amounted to almost 40%, which in terms of money is equal to 82 billion dollars.
There are also statistics where a drop in the value of the gross product in the world by one and a half percent is noticeable. At the same time, relative to Europe, this figure increased by almost 2%. Due to the development of Western countries, GDP declined by 5% in Western Europe. For all the time, the minimum indicator of gross product was just in 1970 and amounted to 215 billion dollars. It reached its maximum level by 2011 and amounted to $ 3,700 billion.
Population and standard of living
It is worth noting that the population of Germany is growing every year. By 2014, this figure reached 81 million people. As you know, the "human capital" in the country is the determining engine of the economic system, so the standard of living and other indicators are important for the state.
As you know, 75% of the total population work in the country. Moreover, the age of workers is from 15 to 64 years. Among them, a larger percentage of men. The average salary is 28 thousand dollars a year. As for housing fees, here the indicators are much higher than in the CIS countries. For example, if a German has his own house, then it takes about 20% of his income to pay. The justifying factor for such an overestimated indicator is that 1.9 people are designed for one resident of Germany, while this figure is 0.9 for a Russian. In addition, housing conditions are also much higher.
Nutrition among the Germans is a holy question. First, everyone who is not employed receives a benefit covering housing and food costs. On average, a family of 4 people per week leaves 400 euros for food. And if for many Russians this is an unbearable amount even per month, for Germany this is only one tenth of the family fund.
Returning to age, it is worth noting that the Germans live relatively long. Men on average survive to 78 years, and women - 10 years more. Naturally, such a life span indicates how comfortable the situation is in society and the country as a whole. In addition to the favorable environmental situation, there are practically no political problems in the country, so such data is understandable. It is very important to note that such comfortable living conditions are connected, first of all, with the inhabitants of the country. The mentality of the Germans is designed so that they are very disciplined, responsible and law-abiding. They love the country and take care of it. The standard of living in Germany is as safe and comfortable as possible.
Thanks to responsibility and punctuality, the Germans work 20% less. This is because during this time they manage to do more work, and their work is much more productive than that of residents of other European countries.
Are there any problems in the economy
Despite Germany’s GDP growth, there are still problems in the country that it is trying to deal with.First of all, it is unemployment. At the beginning of the century, the level of unemployed people grew to almost 4 million people. Over time, these indicators decline, however, they have to work on them now.
To understand what problems arise in the state, let us return 40 years ago. All this time, Germany could safely compete with any state thanks to:
- low price of energy resources imported from Russia;
- expanding the global market and developing the EU;
- specialization in the global market and cooperation with Asia;
- choosing the right direction in technological development: safety, economy, ergonomics and comfort;
- the accumulation of the national fund and the increase in the number of patents.
It can now be argued that most of these aspects are beginning to disappear from the German economic system. Some of them, which were previously engines of progress, are now a “brake”. For example, Japan and China, which produce goods that are not inferior in quality to German, but with a much lower price, took over the status when creating cars a long time ago.
The next danger that awaits the state is the technological crisis. Obviously, the rest of the country has now begun to develop rapidly and irrevocably. In the near future, China will be able to take possession of all the technologies that Germany had previously boasted of. In this case, the Germans will lose their ability to compete and will be “knocked out” of the world market.
The next question relates to energy. More than 20 years, the Germans spent on research and study of solar energy, which at that time was a novelty. Huge finances were allowed to develop this segment, but for all the time shifts were minimal. As a result, the Chinese were able to catch up with Germany with their solar panels and solar cells, which led to the collapse of the market and drowned the Germans hope to become competitive.
Agriculture again continues to slow down the country's economy. Earlier, a special increase in rural land was not observed. Nowadays, it is impossible to maintain the financial condition of the country with either corn or cattle meat, as Argentina, Canada or the United States are now offering the product at lower prices. For the inhabitants of Germany themselves, products of their own production also cannot be called cheap. Due to the high sanitary requirements, the goods become expensive.
Country debts
The GDP of Germany’s foreign debt now stands at about 150%, which equals $ 5.5 trillion in cash. Government debt matters are slightly better. Last year, this figure decreased by 1%. Now public debt is 2.1 trillion euros.
Now it can be argued that the level of the debt quota has improved, its indicators to GDP have decreased by 3-71%. Despite the fact that the course towards the Maastricht Treaty is still a little like the one set, positive dynamics are present. The fall in public debt over 5 years occurred by 10%. This predicament was caused by the 2008 crisis. Due to the fact that the bank rescue program was adopted and effectively implemented by the government, the debt is gradually decreasing.
Salvation or oblivion
At one time, Germany was called the "sick man of Europe." She later became a savior. Now the situation with the economy remains unclear. Despite an established system that previously served efficiently, it began to crumble due to political unrest throughout the world.
It is known that in order to determine the level of development of a country, it is necessary to look at four indicators. The first of these is GDP. Data on gross domestic product in Germany over the past few years has shifted by a few tenths of a percent down or up. Basically, over a year, jumps in GDP do not exceed 0.5%. Nevertheless, even such minor changes in this indicator cannot go unnoticed.
Despite all the current problems that have occurred in Germany, the country is still the most popular tourist destination in Europe. There is also a huge influx of immigrants from Asia. The crisis in the state is more connected with the crisis all over the world. You can’t turn a blind eye to what is happening between Europe and Russia, to the international relations of countries and their political differences. All this affects and is reflected in the country's economy, and after that, on the financial picture of the world.
